Average prices of
many medications
commonly used by elderly grew faster than inflation
Wholesale prices for brand-name prescription drugs between 2004 and
2005 increased by an average of 6.6% -- more than twice the
inflation rate -- according to a study released on Tuesday by the...
Public Policy Institute
at AARP, the
New York Times
reports (Freudenheim, New York Times, 8/16). For the study,
Stephen Schondelmeyer, director of
PRIME Institute at
the University of Minnesota, and colleagues analyzed wholesale
prices of 195 popular brand-name medications over a 12-month period
that ended in March (Wolfe,
Minneapolis Star Tribune,
8/16). The study found that prices for 110 of the 195 brand-name
medications increased between 2004 and 2005. According to the study,
an average older patient who takes three brand-name medications
daily would have experienced a $144.15 increase in prescription drug
costs between 2004 and 2005 (Schmid,
AP/Las Vegas Sun,
8/15). Between 2003 and 2004, prices for brand-name medications
increased by an average of 7.1%, compared with the inflation rate of
2.7% (Minneapolis Star Tribune, 8/16). The study also found
that prices for 75 generic medications increased by an average of
0.7% between 2004 and 2005 (Reuters/Arizona
Daily Star, 8/16). Prices for three of the 75 generic
medications increased in the first three months of 2005, according
to the study.
Criticism
The
Pharmaceutical Research and
Manufacturers of America said that the study used "fuzzy
math" (AP/Las Vegas Sun, 8/15). PhRMA Senior Vice President
Ken Johnson said that the study analyzed only wholesale prices,
which do "not reflect the true amounts paid by seniors for their
medicines." According to Johnson, after rebates and discounts from
health insurers are taken into account, prices for brand-name
medications did not increase at a rate higher than inflation between
2004 and 2005. Joseph Antos of the
American Enterprise Institute
added, "With the new Medicare benefit, no senior will have to pay
the full retail price for prescription drugs."
Other Reaction
However, Dee Mahan, a health policy specialist with
Families USA, said
that analysis of the wholesale prices of brand-name medications is
"valid" because most increases in those prices are passed to
consumers after discounts are deducted. In addition, Ann Smith, a
spokesperson for pharmacy benefit manager
Medco Health Solutions,
said that the average 6.6% increase in prices for brand-name
medications between 2004 and 2005 is "generally what we are also
seeing" (New York Times, 8/16). Schondelmeyer said, "They
certainly do give rebates to some buyers, but the companies keep
raising the base price on which the rebates are given so they're
continuing to collect a lot more money" (Minneapolis Star Tribune,
8/16). AARP CEO William Novelli said, "We are very disappointed that
brand-name manufacturers have failed to keep their price increases
in line with inflation, and we will continue to educate our members
and the public about how best to find the most affordable
prescription drugs to suit their needs" (AP/Las Vegas Sun,
8/15).
The
AARP research is available